Some equipment vendors are bowing to pressure from operators to provide vendor financing in the economic downturn. While that could have worrying overtones of the boom and bust market of a decade ago, vendors insist this time they will keep the deals off their balance sheets. rnNevertheless, analysts question whether vendors should provide financing, given that some have been struggling while operators enjoy good, steady cash-flow. rn"We are on the verge of massive industry investment and I don't see capex disappearing," says Marc Chaya, global telecommunications markets leader, Ernst and Young. "[Operators] have never been in better shape. They are still cash making and ARPUs are maintained. There is no reason for vendors to do this." He adds: "The power has shifted from vendors to operators." rnBut vendors say it can make sense. "There is an increased demand for financing," said Carl-Henric Svanberg, the CEO of Ericsson, speaking at the Mobile World Congress in Barcelona. "It is important as [operators] want to safeguard cash flow, and secur[ing]...equipment [from] financing is a good way." rnChina's ZTE sees the ability to provide operators with financing as a competitive edge currently. "They [the operators] are finding it hard to access credit. It's another string to our bow," says Zarif Imam, the global financing director of ZTE.
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